Interview: With More Investments, the Port of Barranquilla Looks for More Growth

Though Colombia is often more associated with its mountainous and jungle regions, the country relies heavily on its vast abundance of water. It is unique in South America for having both a Pacific and Atlantic coast (via the Caribbean Sea) and also has the might Magdalena River,

As one of the largest rivers in Latin America, the Magdalena has long been a vital source of trade and transportation for Colombia. Because it empties into the Caribbean in Barranquilla, the city quickly rose to become one of the major commercial centers of the country. In recent decades, the economics of the country have evolved, which has lessened the city’s stature to some degree. But along with Cartagena (also on the Caribbean) and Buenaventura (on the Pacific), it remains one of the nation’s three primary ports.

According to Guillermo Peña Bernal, the city is set for something of a rebirth. Investments are being made both in to the port and to make the Magdalena more navigable for larger vessels.

To find out more about the present and future of this critical location for imports and exports, we recently spoke with Guillermo Peña Bernal, vice president at Sociedad Portuaria Regional de Barranquilla, the company that owns and operates a marine terminal at the Port of Barranquilla.

Guillermo Peña Bernal, vice president at Sociedad Portuaria Regional de Barranquilla, and Loren Moss of Finance Colombia speak in Barranquilla. (Credit: Loren Moss)

Loren Moss: To start, can you give me something of an overview of the Port of Barranquilla? How large is it and how much cargo do you move?

Guillermo Peña Bernal: The port zone of Barranquilla goes from the mouth of the river to Kilometer 22, which is at the bridge over the Magdalena River, and in that zone there are several port concessions.

Last year, in 2016, this zone mobilized 8 million tons, of which this port mobilized 4.6 million. At the national level, we handle 14% of Colombia’s external trade. Meaning that of all the imports and exports in Colombia, 14% is done through here.

One of the main partners is Southern Cross, one of the big capital funds in Latin America. The only port they have is this one, and what they do is develop companies, and they dedicate themselves to generating value. They have offices in São Paulo, Buenos Aires, Santiago, Mexico City, Bogotá, and Florida.

“Barranquilla is a city that has been growing continuously for the last 10 years with the unemployment rate going down and the city growing. The city is getting better.” – Guillermo Peña Bernal

Loren Moss: So are they the main owner?

Guillermo Peña Bernal: They have 50-something percent. Nowadays, we were handling 80% of the containers in this zone, and on August 1, the port beside us became part of this one, giving us almost 90% of the container market in this port zone.

Here we import a lot of food for animals — concentrated food for animals — and food for humans, too. A lot of wheat and rice. We have refrigerated storage. This is the only port in the country that has a place to store a lot of imported foods: fish, chicken, and pork.

Loren Moss: Like the things from PriceSmart?

Guillermo Peña Bernal: Everything. Their imports come in through here.

Loren Moss: And that can’t come in through Buenaventura because they don’t have refrigeration?

Guillermo Peña Bernal: They come in refrigerated containers. We do the inspections here and they take them to an external storage facility that we built. We are in the process of using it for someone else who is not PriceSmart, because PriceSmart has its own external storage.

We have six docking lines, including two docking lines for smaller vessels. In total, all together they have 94 hectares. In addition, we have another port concession, which is called Rio Grande where we handle everything that has to do with coal.

Undoubtedly, there is a very strong competition that you’re going to see now. We have six port concessions in this zone and the idea is to have integrated solutions for the clients. What integrated solutions for the clients? Both in imports and exports, I will take care of moving the cargo for you. If you unload the container, I will empty it, I will store it, I will distribute it, I will send it to your facilities, I will so the whole process for you. Or in the case of exports, I will receive the merchandise, I will pack it into containers, I will guarantee you that the authorities check that it doesn’t have any kind of drug or contamination or anything like that, and I will load it on board.

Barranquilla is a city where there are companies that are net exporters. They receive raw materials, they transform them, and they export them. There are all kinds of industries here. There are metal mechanics industries here, and there are food industries here. There are industries that receive foodstuffs and they are processed and exported. There are flour mills here. The important rice-growing industry from the coast is here in this zone.

Now that we have dredging problems, the city accepts. Why? Because the costs go up. I mean, if a ship that arrives with wheat has to go to another port to lighten the cargo, and then it has to come by truck, that puts prices up. A ship with steel that comes and has to be lightened in Santa Marta, because the ship can’t come in here, costs $30 USD extra per ton.

The Port of Barranquilla. (Photo credit: Puerto de Barranquilla)

Loren Moss: That’s a lot. For a whole ship, that will be a lot. What do you mostly handle?

Guillermo Peña Bernal: We handle general cargo. General cargo is everything that has to do with iron, steel, cement — everything that comes as loose cargo. That’s 19% of our volume. 25% is the containers that we handle here in the port. 41% is grains that come in the ship’s holds and have to be taken out and stored, and 15% is coke. It isn’t coal, it’s coke. It’s a process to make steel. We don’t have a license to handle thermal coal.

Loren Moss: That goes to Santa Marta, right?

Guillermo Peña Bernal: A big part goes out from Santa Marta, yes. Or here in “Carbones del Caribe.” They have a license.

Loren Moss: There is a percentage of products that come from further down the Magdalena River that need to come here to re-package the contents, correct?

Guillermo Peña Bernal: A great part of what we can do is to unload here as a maritime port for large vessels and load barges and take them upriver where we are partners in a port in Barrancabermeja too. So, it takes them upriver in barges to Barranca and there we have storage silos, or from there they go by truck to the rest of the country. In any case, a truck carries 34 tons. A barge carries 1,500 tons.

“It is much more economical to transport materials to the interior of the country by river.” – Guillermo Peña Bernal

In all, there are 22 port concessions on the river and the highest up the river is Barrancabermeja. It gets to Gamarra, where the river is flat. From Gamarra to Barranca the river starts to go up 500 meters more in altitude. And after is what they’re trying to recover by navigating up to La Dorada in the foothills of Bogota — where the center of consumption is. I wish we could get up to there!

Loren Moss: What are some of the big developments lately at the port?

Guillermo Peña Bernal: We have been getting better in question of technology, trying to automate processes. Security has been a source of investments — container patios are all closed with high-definition cameras. All the equipment has satellite tracking. Anything that goes into a container patio without authorization triggers the alarm and it is filmed to avoid them putting things into the equipment.

And we have made an investment in infrastructure. Right now, we are awarding contracts for re-surfacing of all the patios and the roads. That’s a lot of money that we put into that. There were 128 projects of which 68 have been carried out in a year with more plans for the next three years. And since this is a concession, many of those plans are authorized by the government.

Loren Moss: That’s something that I wanted to ask about. How does the port work like a private business but with public importance?

Guillermo Peña Bernal: It is a public port for public use. If you’re going to export something or import something, I can’t tell you not to. I mean, I can’t tell you that I don’t like you or that you have a bad reference and you can’t come in. The only thing I can tell you is that I’m not giving you credit so you have to pay cash. I can’t deny access to anyone.

That is a concession that was initially for 20 years and it was extended until the year 2033. We administer, we make the investments, we pay the government a compensation, and we develop everything that has to do with the logistical platform container repairs and all services to cargo.

Loren Moss: What is the capacity? Which are the biggest ships that can work and the greatest draft?

Guillermo Peña Bernal: Ships come in here up to some Panamax. The greatest draft that we have managed to have is about 10 meters. I mean, ships with a draft of 9.7. We have had a restriction, because an islet is being created there and they have reduced the depth to 8.5. It seems to be a result of the new bridge that they’re building and the piles. That’s why we were waiting for a dredger to come and clean up that piece of the channel.

Ultimately, this is a country where the rivers are so important. This city used to be called “The Gateway to Colombia” because even Christopher Columbus passed through here on the river.

Loren Moss: The Magdalena, yes.

Guillermo Peña Bernal: The river was navigable in small vessels, and the way the country had always fed itself was by means of the river. The more the river was abandoned — the government abandoned the river and dedicated itself to road transport — until nowadays when the quantities and volumes of internal consumption are too high. It is much more economical to transport materials to the interior of the country by river.

This is a country where Barranquilla was the most important city in the country because everything came in through here. In the 1960s — when the economy moved to where consumption was, and this was a country centered around the production of coffee — the coasts were abandoned, the river was abandoned.

And all the industry — a great deal of that textile industry that you see nowadays in Medellín — a lot of that was born here. All of that was moved into the interior of the country, because that’s where there was more population, because of the people who cultivated coffee on the big plantations. It was moved there because the country closed imports. The only thing that was consumed here was what the country produced.

Nowadays the country wants to be an exporter again, and it has opened up again. It has to started to move industry towards the coast. And that’s what’s happening in Barranquilla. Barranquilla is a city that has been growing continuously for the last 10 years with the unemployment rate going down and the city growing. The city is getting better.

When I went to study in Bogota — I first left here 40 years ago — Barranquilla was a city where you picked up the telephone receiver and the telephone had no tone. You had to have a bath in the garden because the water didn’t have enough pressure to get up to the house. It was an abandoned city because industry went away, and it turned into a completely commercial city. Nowadays the city is blooming again, companies have moved here, and the city is growing again at an important rate.

Loren Moss: That is something impressive about Barranquilla is that although it isn’t so famous, it’s really like an industrial heart.

Guillermo Peña Bernal: Barranquilla is, and I say this because of other things I’ve worked in before, a university center. I mean, people are trained here. It’s an industrial city, right? It’s a commercial city. It has a lot of commerce.

The whole coal industry brings its heavy machinery to be repaired here in Barranquilla because there is a good workforce and skilled people. And bilingualism. A high percentage of the people in Barranquilla speaks English. That is because people, when they are small, they get to know Miami before Bogotá because it was easier. There used to be a flight that went from Miami to Barranquilla every day long ago.

To tell you the story, back then, the bridge over the Magdalena River didn’t exist. So to get to the interior of the country, it was by ferry. You had to put the car on a ferry and cross the river, and that was a complication. When this was opened, I was already at university. The bridge was opened around the year 1980, and the traffic improved.

The Port of Barranquilla. (Photo credit: Puerto de Barranquilla)

Loren Moss: Tell me about the future of the port. In five years, since you already have a strategic plan, what differences will we see in the port, in its capacity, in the importance of the Port of Barranquilla?

Guillermo Peña Bernal: The difference is that in five years the dredger will be working and we will have a depth of more than 10 meters to be able to take in bigger ships. The ports upriver will be working. We’re going to start moving a lot of merchandize on the river. That’s not being done nowadays because the river was relatively dry. Remember what I was telling you about loading a barge with 1,500 tons? Earlier this year you couldn’t put more than 700 tons on one because it would run aground.

So, I think that once the river is stabilized, it has to become a source of development and transport between the interior and the country. The interior continues to be 60% of the consumption of this country. I mean, the interior requires raw materials, transforms them and exports them.

“The fact that the country is entering into a stage of peace has to kickstart the country. Foreign investment has to get better. Tourism is getting better.” – Guillermo Peña Bernal

For example, Medellín is a very export-oriented city. And where does it export from? From here, or from Tolú. But the Port of Tolú still has a long way to go. In five years it should be better.

And around here they’re thinking of making a deepwater harbor that lets us handle those big ships. But in any case, those big ships are going to bring and leave cargo, but the cargo going to the interior of the country has to come in through these river ports.

Loren Moss: If an exporter is looking for a port and wants to send containers from Barranquilla to Miami, is that expensive? About how much does it cost for a whole container?

Guillermo Peña Bernal: It depends on the area, it depends on the size, it depends on the product, it depends if it is a refrigerated container, it depends on if it is oversized, and it depends on the weight.

The thing about containers is that they can hold up 30 tons but the average weight is 13 tons. If I am in the interior and I want to send it to Miami, I have to send it to the coast. If I send a container that only weighs 13 tons, the freight costs for cargo are very high.

What I have to do is send the cargo loose in a whole truckload of 30 tons. It comes here to the port, and in the port, I fill it for you. I fill the containers that it needs, and you save those freight charges and so you reduce the overland freight component. But just to give you a figure, have you brought the container from Miami here?

Loren Moss: The container is already here.

Guillermo Peña Bernal: That will cost you about 900,000 pesos. Call it 1 million pesos.

Loren Moss: That’s cheap.

Guillermo Peña Bernal: To take that same container to Bogotá will cost you 5 million pesos.

Loren Moss: Exactly.

Guillermo Peña Bernal: And to return the container will cost you 4 million pesos. Because you have to return the container to us. So, what you should have to do is empty the container, leave the container here for me and send the truck to its final destination, and you save the 4 million for the return freight charges.

Loren Moss. It fascinates me that it costs so little to send a container from here to Miami. This is really good. This must boost exportation so that Colombia can take advantage of the treaty that it has with the United States.

Guillermo Peña Bernal: Yes, I’m a believer in Colombia. If you look at my resume, I’ve lived in Chile, I’ve been in Venezuela, I’ve been in Guatemala, I’ve lived in the Dominican Republic, I’ve been in many places. And I wanted to come back to Colombia because I’m a believer.

Whether we like how the peace process was handled or not, the fact that the country is entering into a stage of peace has to kickstart the country. Foreign investment has to get better. Tourism is getting better. When tourism gets better, more people come. There is more money circulating. They need more hotels, they need more food, they need more of many things. The country has to get into the habit of growing.